Cycle to work scheme??

[Norm]

Back to the discussion, the critical requirements seem to be that it is available to all but the monthly "salary sacrifice" for any employee cannot exceed their gross monthly salary. So, if in example an employee earned a gross £12 per year, the largest amount they could spend in the scheme would be £12 but, important to note, technically they would not be excluded from the scheme.

All of which would be fine, if we didn't have a national minimum wage.

But we do have a national minimum wage, so it is mostly wrong.

 

[marinyork]

As per the co-op there's a guy who has the title of ethical working or something like that, he's even been on countryfile and supposedly very powerful, I'd try and find out his contact details. As the co-op is pretty much the most cycle friendly supermarket there should be some give there (the original co-ops, not the somerfield half).

 

[Mille]

What I am curious about is what will happen later this year when my 3 year (yup, we have to wait 3 years) arrangement ends. At the end of this period I will have sacrificed salary (before tax) to just below the value of the letter of collection I used to get the bike plus a few extras. The value of the bike itself at the time I collected it may well have been less than the amount I have sacrificed.

The before tax amounts don't matter, what you have actually paid is the difference in your net pay.

And most employers seem to equate 'fair market value' to 5% of the original value.

 

[Chrisc]

*draws breath*
There were no new rules brought in last November. That is how the rules have always been written!

New rules may not have been written but HMRC published a document entitled ‘Salary sacrifice arrangements involving cycles and bus passes’ in December 2009. The 'clarification' in this document re- the tax exemption position of employees at or near the NMW has rendered the scheme unworkable from the point of view of my company and, I suspect many others. This coupled with the enforcement of the existing rule about fair market valuation will do nothing top promote the uptake of cycling via this scheme.
As our HR dept put it, it's a dead duck.

 

[Norm]

The clarification merely re-stated the rules as they have always been. Tax evasion is not a good thing, whether it involves moving to the Bahamas or a poor implementation of the Cycle To Work provisions.

How many employees in your company are close to the NMW, which is the equivalent of around £11.5k a year for full time staff.

The implementation guidance notes themselves give an alternative - to allow the scheme for all employees but to limit the purchase price or extend the loan period. In other words, your scheme rules can say "open to all employees" but then say "you cannot sacrifice salary which will take you under the NMW". This would mean lower paid staff would only be able to borrow smaller amounts over longer periods but everyone would still be eligible to join.

Or you could just say it's a dead duck and not take the potential savings.

 

[Chrisc]

So basically the schemes to date have been bending the rules a little and now the enforcement is being applied it makes things tricky. I've no idea how many of our employees are close to the NMW, a lot are part time students tho and with minimal hours will be under it. There are also around 3000 staff so maybe that makes things awkward, or it could be that our HR just can't be ar*ed...

Either way I'm glad I'm not involved now, I own the bike and don't have to think about it after all the months of arguing we've endured. Just not worth the hassle for a couple of hundred quid I'd have saved.

 

[Theseus]

I have just found out that we are not operating within the governments cycle to work scheme and are not affected.

I sent the following to HR ...

It has come to my attention that guidence from the government was issued last November concerning the enforcemnt of the rules for Cycle to Work Schemes. One element of this was the valuation of the bike at the end of the agreement. As my agreement is due to conclude later this year, I would like know what the process is for obtaining the valuation.

... and got the following in reply ...

The bike you have elected for is not part of the Government Cycle to Work Scheme so the rules will not apply and no valuation will be given.
Should you have any further queries relating to this email, please call the helpdesk.

So, still confused, I rang the helpdesk. Ours are treated as a benefit in kind just like any of the other benefits my employer offers and are reported on the P11D.

 

[theloafer]

my work is thinking of starting this after work council had talks today ...they say its a go just need to know how to get it up and running....balls in my court..any of you more in formed people point me in the best direction as to where or who to contact....

thanks larry

 

[Norm]

There's isn't really a "who" that you can contact. What sort of information are you looking for? How large is your company?

 

[theloafer]

hi norm
we have about 130 at presant cyclist interrested poss 45

 

[theloafer]

the powers that be want to know how you go about setting the scheme up and how it runs

 

[Norm]

You have a PM.

 

[theloafer]

thanks alot for your reply norm

 

[Norm]

No problem, please let me know if there's anything else I can offer.

 

[buggi]

Why don't you write a letter to your Chief Exec, outlining the "green" theme and that this would be in line with company policy.

We have bike to work, but it's mostly promoted at the main office. an email to our Chief Exec saw a pile of facilities installed in other offices.

i still have the email if you want to plageurise it, and tailor it to your needs/company's policies. if you want a copy pm me your email and i'll get it off my work's pc next time i'm in work.